System and method for secure management of digital contracts

ABSTRACT

A system and method for the secure management of digital contracts utilizes technology from the following fields: digital timestamping, encryption, distributed storage, and distributed payment systems. The existing state-of-the-art contract management systems require counter-parties to give a substantial level of trust to third parties to perform functions such as storage and verification. This system and method reduces the amount of trust that the counterparties need to give to a single third party. The system and method may be used for the secure construction and management of digital contract data and metadata.

CROSS-REFERENCE TO RELATED APPLICATION

This application claims the benefit under 35 USC 120 as continuation ofInternational Application No. PCT/US2017/16380, filed Feb. 3, 2017, andtitled “SYSTEM AND METHOD FOR SECURE MANAGEMENT OF DIGITAL CONTRACTS”and U.S. Provisional Application No. 62/290,863, filed Feb. 3, 2016, andentitled “SECURE MANAGEMENT OF DIGITAL CONTRACTS, SYSTEM AND METHOD”,the entirety of which is incorporated herein by reference.

FIELD

The present system and method relates to the construction, processing,storage, and management of digital contracts. The present system andmethod utilizes technology from the following fields, digitaltime-stamping, encryption, distributed storage, and distributed paymentsystems.

BACKGROUND

A contract may contain, but is not limited to, contract data and mayalso include metadata. Contract data includes, but is not limited to, aplurality of documents specifying details such as the counter-parties,terms and conditions, scope, arbitration conditions, signatures, notaryseals, and may also include metadata. Contract metadata includes, but isnot limited to, trustee identity and details, time of signaturecollection, and data used to maintain authenticity. Digital contractsare contracts that are processed and stored by computers. Digitalcontracts offer efficiency advantages over traditional contracts, byenabling faster and less expensive services. Contract construction andmanagement services are increasingly being offered online using theSoftware as a Service business model.

A contract requires two or more parties (counter-parties) to beconsummated. For authentication and verification purposes most contractsrequire a trustee to attest to the occurrence and exact details of thecontract. The trustee is an entity which is trusted by all parties tothe contract. The trustee can be a bank, title company, law firm, notaryor any other entity trusted by all the contract counter-parties.

The requirement of a trustee introduces additional cost to the contractcounter-parties. Contract counter-parties require the trustee to providea minimum level of security for the construction, negotiation,agreement, proof and evidence of occurrence, possible future arbitrationof the contract, and other processes relating to the contract. Contractconstruction refers to the process counter-parties undertake to arriveat an agreed upon contract that may be legally binding. This includes,but is not limited to, drafting the contract text, defining terms andconditions (e.g., the requirements specified in the contract thatdetermine its validity), collecting signatures, and possibly generatinga trusted time-stamp. A contract may have a signature expiry time thatrequires a counter-party to sign the contract before a specified date,in order for it to be valid. For example, the expiry time may be aparticular date before which all of the signatures must be obtained, theexpiry time may be a time by which the contract must be signed or theexpiry time may be a period of time (hours, days, minutes, etc.) inwhich the contract must be signed. After the contract has beenconstructed, counter-parties may use a contract management service tostore the contract over a period of time. Contract management refers tothe process and systems that store and maintain contract data andmetadata.

Digital contract construction and management systems require approachesto contract security that may be different from traditional contractsecurity measures. For example, most traditional contracts require thephysical signature of the counter-parties, whereas digital contracts useelectronic signatures. Online services using electronic signatures mustadditionally verify the identities of the signators.

There are different approaches to digital contract construction andmanagement depending on the users' requirements, the service providers'development and maintenance costs, and inherent technologicallimitations. Hereafter, we use “contract” and “digital contract”interchangeably. A person of ordinary skill in the art will find ageneralization of the discussion to encompass applications with multiplecounterparties straightforward.

Contract construction and management systems generally address fiveimportant security requirements, 1) privacy, 2) authenticity, 3)integrity, 4) synchrony, and 5) availability.

Privacy refers to the requirement that certain contract data andmetadata, based on an agreement between counter-parties, is onlyintelligible to the counterparties involved in the contract. Thirdparties should not able to gain access to the content of the contractwithout the consent of at least one of the counter-parties.

In the start-of-the-art, privacy is often enforced using eithersymmetric or asymmetric encryption. With symmetric encryption, a singlekey is used to encrypt and decrypt the contract data and metadata. Forexample, two counter-parties may agree on a passphrase, and then useAES-256 to encrypt the finalized contract using this passphrase as thekey. The term “key” in this context refers to a piece of informationthat determines the output of a cryptographic algorithm. Using thismethod, the encrypted contract data and metadata can then safely bestored in a public database for a future arbitrator to examine, upon oneof the counter-parties making the passphrase and encrypted documentavailable to the arbitrator.

With asymmetric encryption, or public-key cryptography, two separatekeys are used to encrypt and decrypt contract data and metadata. Animportant advantage to asymmetric encryption over symmetric encryptionis that the counter-parties do not need to share a secret passphrase.

The authenticity requirement has two components, 1) signatureauthenticity, and 2) identity association. Signature authenticity is therequirement that, 1) a signature can be associated with a uniquesignator, 2) generating the exact same signature by another party isextremely unlikely, and 3) other parties are able to confirm that thecontract was signed by the said unique signator.

Identity association is the requirement that the signator can beassociated with a real world identity (e.g., a particular individual orcompany) by all counter-parties and designated external parties. Inpractice, identity association typically requires trusting a third party(e.g., a certificate authority or public key infrastructure) to verifythe identity of the contract signators.

Integrity is the requirement that a contract cannot be modified after ithas been signed by all counter-parties. Specifically, once anycounter-party signs the document, the contract cannot be changed withoutrequiring all counter-parties to sign the contract again.

One method to ensure integrity is to apply a cryptographic hash functionto the contract data (e.g., SHA-256). A cryptographic hash functiongenerates a fingerprint for each contract. The fingerprint is thenstored securely. One can be very confident that 1) if two contracts havethe same fingerprint then the contracts are identical and 2) an attackerwho gains access to the fingerprint cannot gain any meaningfulinformation about the contract.

In the state-of-the-art, integrity and authenticity are provided using aMessage Authentication Code or Hash-based Message Authentication Codealgorithm (e.g. HMAC-SHA1), with the contract and signator'sauthentication key as input. These algorithms must be used inconjunction with other mechanisms to ensure security. For example, insome systems the fingerprint, signator's keys, and the original contractmust be available to an arbitrator to verify integrity.

Synchrony is the requirement that all relevant parties agree that thecontract was signed at a particular point in time. The relevant partiesmay include, but are not limited to, the contract counter-parties andpossibly arbitrators. Specific contract details, for example, terms,conditions and execution, may be a function of time, which makessynchrony paramount to contract validation.

In the state-of-the-art, synchrony is achieved by trusted third partytimestamping systems that keep track of the creation and modificationtimes of the contract data. A limitation of these approaches is thatthey may require the trusted third party time-stamping service to beavailable at the time of verification or arbitration.

In the state-of-the-art privacy, authenticity, and integrity areaddressed using industry standard cryptographic tools such as PGP with apublic key infrastructure to perform real world identity association,however contracts also have the synchrony requirement that is notdirectly addressed by these systems. For example, an arbitrator and thecontract counter-parties must also know and agree when the contract wassigned in order to evaluate the terms and conditions.

A weakness of existing contract management systems is that either theydo not provide trusted time-stamping, or the responsibility of synchronyis placed with a single third party (e.g., a single company, ororganization). This requirement implies that if the said third party canno longer be trusted, or if it ceases operations, then previouslygenerated time-stamps cannot be verified. This is a technical problemthat exists with existing contract management systems.

Availability is the requirement that the contract be available to anydesignated third party in the future over some reasonable period of time(e.g., the lifetimes of the involved counterparties) while maintainingthe aforementioned security properties. This can be achieved by eitherassigning the responsibility of contract availability to the involvedcounter-parties or trusting a third party entity to store the contracton behalf the contract counter-parties.

Contract availability has two components, 1) time availability and 2)accessibility. Time availability refers to the period of time over whichthe contract data and metadata can be retrieved by any of thecounter-parties. Accessibility is measured by the delay and costincurred by the counter-parties to retrieve the contract's data andmetadata. For example, a contract management system with highaccessibility may cache contract data and metadata in severalgeographically disparate servers across the globe, so that globalcounter-parties can retrieve the contract data and metadata fast and atlow cost.

A weakness of present contract management systems is that they assignthe responsibility of contract availability to a single third party(e.g., company or organization). This limits the level of contractavailability to the resources and lifetime of the said single thirdparty. Note that this limitation grows with the size of the arbitrationwindow, i.e., the longer the time period for potential arbitration, themore risk in trusting a third party.

There are five security requirements addressed by many of thestate-of-the-art contract management systems. Recently BitcoinBlockchain technology has been suggested as a possible solution to someof these security requirements. Below we discuss distributed publicledger technology, i.e., the Bitcoin network, in the context of contractmanagement security. The paper “Bitcoin: A peer-to-peer electronic cashsystem” (Nakamoto, 2009) is incorporated into this application byreference. Users submit transactions to the Bitcoin network. Minerscollect these transactions and group them together to construct a newblock. Subsequently miners verify and attach the newly created block tothe most recently verified block. Further, miners attach to each block atime-stamp of when the block was constructed that remains permanentlyunaltered. Miners then proceed to gather new transactions to constructthe next block, and this process repeats. Nodes in the Bitcoin networkstore this chain of blocks, i.e., Blockchain, in a cryptographicallysecure way.

The Bitcoin protocol supports a scripting language, i.e., BitcoinScript, to construct transactions with possible execution constraints.Bitcoin Script enables users to embed data into a transaction, via theOP_(‘)RETURN command in current the implementation.

An example constraint supported by Bitcoin Script is a deadline which isa predetermined execution time before which the transaction will not beprocessed, via the LOCKTIME field in the current implementation. Otherconstraints include M-of-N multi signature which requires Mcounter-parties of N total counter-parties to sign the transactionbefore it is valid.

The Blockchain is maintained by thousands of nodes to ensure that theverified blocks remain permanently accessible and unaltered. TheBlockchain is publicly accessible to download globally from many ofthese nodes. Nodes in the Bitcoin network have an incentive to maintainthe network's security, availability, and robustness.

Historically Bitcoin has improved in response to security andperformance concerns. As more and more applications are built on theBitcoin network the security and longevity of this system is expected toexceed that of most centralized networks.

The Bitcoin network is a public, permissionless network. Blockchaintechnologies do not necessarily need to be public or permissionless.Entities can create a distributed private ledger consisting of a groupof entities that participate in the private network and restrict who canpublish or access the network.

A person of ordinary skill in the art in the field of this system andmethod is familiar with distributed source control systems, such as Git.

A contract construction or contract management system is said to bescalable if it can support an increasingly large number of contractswithout severely impacting key performance metrics such as processingtime, cost, or availability.

Digital contract management systems can enable automated contractexecution with execution constraints. The management system mayautomatically trigger and execute events specified in the contract.

Most contract management systems require users to place trust in asingle or a few third-parties. These systems do not necessarily meet theidentified security requirements for contract management systems. Whatis needed is a contract management system that reduces the amount oftrust users place in a single or a few third parties and improves uponthe security limitations of the current state-of-the-art.

BRIEF DESCRIPTION OF THE DRAWINGS

For a more complete understanding of the invention, reference is made tothe following description and accompanying drawings, in which:

FIG. 1 illustrates an example secure contract management systemenvironment;

FIG. 2 illustrates an example secure contract management server;

FIG. 3 illustrates an example flowchart for facilitating secure contractmanagement storage; and

FIG. 4 illustrates an example secure contract data and metadata storagearrangement.

DETAILED DESCRIPTION OF ONE OR MORE EMBODIMENTS

The system and method may achieve availability of contract data andmetadata and reduce the amount of third party trust required for securecontract management. The system and method are able to constructcontracts with time availability and accessible contract constructiontime-stamps and securely store contract data and metadata. The systemand method may achieve scalable contract management. The system andmethod support contract execution.

To achieve greater security properties than those of the existingstate-of-the-art contract management systems, the system and methodfacilitates contract construction and places contract data and metadataacross several distributed systems. The system and method uses a processconsisting of several steps described herein, to construct and managedigital contracts.

The system and method discloses a process whereby counter-partiesconstruct a contract. The system and method subsequently stores thecontract data and metadata in a private repository (e.g., a distributedversion control system) that is accessible via a URL to entities withthe necessary credentials. The system and method also stores contractdata and metadata on a Distributed Ledger. The system and methodgenerates and submits records that contain the encoded URL and areference to the contract data. For example, the system and methodgenerates and submits Bitcoin transactions that contain the encryptedURL and cryptographic hash of the contract data. These records aresubsequently placed on a Distributed Ledger, e.g., on the BitcoinBlockchain. Each record belongs to a block which contains metadata thatmay include a permanent time-stamp. References to these records areadded to the private repository, thus establishing a mutual referencebetween the private repository and the records stored on the DistributedLedger. The contract data and metadata are subsequently accessible inoriginal, encrypted, or cryptographic hash format, from the DistributedLedger. A counter-party may specify contract constraints, such as apredetermined execution time.

The system and method accordingly comprises the several steps and therelation of one or more of such steps with respect to each of theothers, and the apparatus embodying features of construction,combinations of elements and arrangement of parts that are adapted toaffect such steps, all is exemplified in the following detaileddisclosure.

The arrangement in FIG. 1 shows an exemplary arrangement of oneembodiment of the system. In this embodiment, there is an environment100 consisting of a user 101 using a device 104 which interacts with aSecure Contract Management Server 108. The Secure Contract ManagementServer 108 is connected to a network 107 using an interface 111b. Thedevice 104 is a computer consisting of at least a processor 105 andmemory 106. The user interacts with the server 108 by using a GUI 103running on the device. The device 104 communicates with a server 108over a network 107, using a network interface 111a. The device 104 andserver 108 may communicate with a Data Center 110 that is connected tothe network using a network interface 111d. The device 104 and server108 may communicate with a Distributed Ledger Node 109 that is connectedto the network 107 using a network interface 111c. The DistributedLedger Node 109 provides services for specific clients to access andmodify a distributed public, or private, ledger 401 (e.g., Bitcoin). Theserver 108 may communicate with the Distributed Ledger node through aninterface 112 that is not connected to the network 107. The SecureContract Management Server 108 constructs, manages and securely storescontract data and metadata on behalf of the users.

The Distributed Ledger Node 109 executes software that connects to anetwork that maintains a distributed ledger and provides an API toexpose distributed ledger functions. In this disclosure, the softwarereferred to herein is one or more pieces of software comprising aplurality of lines of computer code that may be executed by a processorwith memory so that the processor is configured to perform theoperations specified by the software. Distributed ledger functionsinclude, but are not limited to, managing wallets, creatingtransactions, validating transactions, and determining the number ofblock confirmations for a transaction. This API is utilized by for theSecure Contract Management Server 108.

In some embodiments, the Distributed Ledger Node 109 runs a Bitcoinclient full node and provides a REST API to clients, for example theSecure Contract Management Server 108. In some embodiments, theDistributed Ledger Node 109 interfaces with the Bitcoin network usingspecialized hardware components, for example Bitcoin ASIC (ApplicationSpecific Integrated Circuit). The Distributed Ledger Node 109 may beimplemented on a computer system that has a processor and memory.

The Data Center 110 may consist of a plurality of servers, possiblyrunning virtualization software. The servers may execute software in amulti-tenant environment on behalf of customers. The Data Center 110 mayprovide service level agreements (SLA) to ensure a minimum level ofservice characteristics, possibly including software performance,security, and data storage redundancy. Such software may include, but isnot limited to, web servers (e.g., Apache, Nginx), light-weightcontainer management (e.g., Docker), and version control systems (e.g.,Git).

The Secure Management Server 108 executes software to perform contractmanagement and contract construction functions. Such software mayinclude, but is not limited to, a Bitcoin Full node (e.g., bitcoind),Bitcoin Simplified Payment Verification (SPV) clients (e.g., bitcoinj),version control systems (e.g., Git), relational databases (e.g.,PostgresSQL), non-relational databases (e.g., mongoDB), queuing (e.g.,RabbitMQ), and containerization (e.g., Docker) software.

The Device 104 executes software that communicates with the SecureManagement Server 108 and provides a GUI with affordances for the user.Such software may include, but is not limited to, a web browser (e.g.,Safari, Google Chrome), a web application (e.g., written in JavaScript,HTML), a native application (e.g., written in Java, Swift, orObjective-C), or a “hybrid” application (e.g., utilizing the ionic,Phone Gap, or Cordova frameworks).

The arrangement in FIG. 2 illustrates the elements in the SecureContract Management Server 108 in one embodiment. The server consists ofat least a processor 201 and memory 202, as well as multiple engines211-217 and databases 221-223. Each engine 211-217 and/or each database221-223 may be implemented in hardware or software. When a particularengine or database is implemented in software, the engine or databasemay be a plurality of lines of computer code/instructions that may beexecuted by a processor of the server 108 so that the processor isconfigured to perform the operations of the particular engine or thedatabase. When the particular engine or database is implemented inhardware, the engine or database may be a piece of hardware, such as anASIC, integrated circuit, appliance, microcontroller, etc. that performsthe operations of the particular engine or database. The enginescommunicate with each other, the databases, and other hosts on thenetwork, to perform contract management functions. The server 202 storesand has access to at least two Bitcoin Wallets, W1 203 a and 203 b.Functions of each engine may be implemented in software, hardware or acombination thereof. The engine may execute software as processes acrossmultiple physical or virtual servers, each server with a plurality ofprocessors and memory. The engine and databases may store and load datato and from a plurality of storage systems that use volatile andnonvolatile memory and storage. Certain storage hardware used by thedatabases and engines may temporarily be disconnected from these systems(e.g., Bitcoin cold storage or offline hardware wallet). The TransactionEngine 211 performs functions possibly including, but not limited to,constructing Distributed Ledger transactions, managing DistributedLedger wallets (e.g., Bitcoin SPV wallets), submitting transactions to aDistributed Ledger node (e.g., 109), and computing transaction fees.

The Validation Engine 212 performs functions possibly including, but notlimited to, determining the number of block confirmations for aDistributed Ledger transaction, determining the transactions within ablock, and maintaining a list of unconfirmed transactions.

The Encoding Engine 213 performs functions possibly including, but notlimited to, computing symmetric encryption functions (e.g., AES-256),computing cryptographic hash functions (e.g., SHA-256), validation ofcryptographically signed documents, executing compression algorithms(e.g., GZip), computing message authentication codes (e.g.,HMAC-SHA256), and character-encoding transformations.

The Signature Engine 214 performs functions possibly including, but notlimited to, collecting signatures from users. The Signature Engine 214may collect, for example, through electronic signatures or uploadingphotos of signatures.

The Payment Engine 215 performs functions possibly including, but notlimited to, issuing payments on behalf of users, verifying paymentreceipt, moving funds between escrow accounts, and maintaining paymenthistories.

The User Account Engine 216 performs functions possibly including, butnot limited to, user registration, user authentication, and passwordmanagement. The Contract Processing Engine 217 manages the state of acontract as it is processed according to FIG. 3. This engine performsfunctions possibly including, but not limited to, contract negotiation,collection of contract details, and coordination with the other engines.

The Contract Details Database 221 may store data including, but notlimited to, contract data, contract metadata, distributed ledgertransaction information (e.g., Bitcoin transaction hash identifiers),user information (e.g., user IDs and signatures), a URL referencing thePrivate Repository Database 223, access credentials to the PrivateRepository Database, and the contract processing state (e.g., the stateof the contract with respect to FIG. 3).

The User Accounts Database 222 may store data including, but not limitedto, user's name, address, system user ID, password, cryptographic hashof the password, signature, private key, email address, photo, bankaccount details, social security number, and other identity information.

The Private Repository Database 223 may store data including, but notlimited to, contract data, contract metadata, distributed ledgertransaction information (e.g., Bitcoin transaction hash identifiers),user information (e.g., user IDs and signatures), and repositorymetadata (e.g., revision history, required database authenticationcredentials).

The elements of the system shown in FIGS. 1 and 2 provide a technicalsolution (using the various elements described above and the methoddescribed below) to address the technical problem of exiting contractmanagement systems described above.

The flowchart in FIG. 3 illustrates an exemplary secure contractmanagement process, in a preferred embodiment. These steps illustratedin the flowchart may be executed across a plurality of servers thatcommunicate over a network. In some embodiments, a step in the flowchartexecution may be executed on specialized hardware, e.g., an ASIC, FPGA,or GPU. This flowchart maybe executed by the Secure Contract ManagementServer 108 as follows:

The REGISTER state 301 represents the user registration with thecontract management server 108. Users 101 register with the server 108and create accounts using a browser through a web interface GUI 103where they specify an email and password. The email address is thenverified. A CAPTCHA is used during account registration andauthentication. Registration functions are performed by the UserAccounts Engine 216 which modifies the User Accounts Database 222. Insome embodiments users can upload private keys that are used to signdocuments and private keys that belong to Bitcoin wallets. In someembodiments a default Bitcoin wallet may be assigned to users. In someembodiments users may be required to prove their real world identity, bymeans of providing additional information, e.g., uploading a driverslicense photo or providing a subsequently validated bank account number.

The INIT state 302 represents the construction of the contract. In thisstate a user, labelled the first counter-party, specifies all thecontract details. These details may include, but are not limited to, thecounter-party email addresses, the contract signature expiry time, adigital copy or scanned copy or photograph of the contract document, anoptional message, and optionally the required payment details of thecontract. Once the first counter-party has specified all the contractdetails, she signs the contract and sends it to the counter-party viathe system, labeled the second counter-party, or counter-parties. Any ofthe counter-parties may be invited to register during this state.Contract construction functions are performed by the Contract ProcessingEngine 217 which modifies the Contract Details Database 221. Contractsigning is executed by the Signature Engine 214 which modifies theContract Details Database 221. In some embodiments, the contract detailsare immutable after the INIT state, and cannot be altered. In someembodiments the counter-parties are identified using a user name. Insome embodiments the counter-parties are identified using a public keyor a Bitcoin wallet. In some embodiments the contract document isgenerated via a contract template. In some embodiments there aremultiple contract documents. In some embodiments the payment may be infiat currency or digital currency.

The SIGN state 303 represents the signature collection state. Eachcounterparty can sign, ignore, or reject the contract. If the contractis rejected by any of the counter-parties, or it has not been signed byall counter-parties by the expiry time, it will become INVALID 305. Oncea counter-party signs the contract it can no longer reject the contract.If all counter-parties sign the contract, then the contract goes intothe ALL SIGNED 306 state. The Signature Engine 214 accesses and modifiesthe Contract Details Database 221 and User Accounts Database 222. Thecounter-parties may sign the document using a document signaturemechanism which communicates with the Signature Engine 214. Thesemechanisms include, but are not limited to, signature using public keycryptography, e-signature, a hand drawn signature using a mouse ortouchscreen, or a photo of a physical signature. In some embodiments thecontract is negotiated by the counter-parties. In such an embodiment,each counter-party can suggest changes to the contract. The suggestedchange effectively generates a new contract. Subsequently, all othercounter-parties can suggest additional changes to, ignore, reject, orsign the new contract. In some embodiments each original counter-partycan specify a proxy signator to sign on their behalf. In such anembodiment, the proxy signator is another registered user that isidentified by the original counter-party. To use proxy signators, theuser who constructs the contract must enable proxy signators for thecontract as part of its construction. Contracts that allow proxysignators are indicated as such to all of the counter-parties. In someembodiments each counter-party can specify a script as the proxysignator whose decision to reject, ignore, or sign the contract isexecuted by the contract management system. The capabilities andfunctionality of the script are predetermined and limited by thecontract management system. The script analyzes the contract data andmetadata to determine whether to reject, ignore, or sign the contract.The script's decision is sent to the contract management system whichexecutes the decision on behalf of the counter-party.

In some embodiments, the user who constructs the contract specifies thatonly a subset of the counter-parties need to sign the contract for it toenter the ALL SIGNED 306 state and proceed to the PRIVATE STORAGE 307state. For example, in a “2 of 3” contract any 2 out of the 3counter-parties need to sign the contract for it to enter the ALL SIGNED306 state and proceed to the PRIVATE STORAGE 307 state. In someembodiments the user who constructs the contract specifies paymentamounts and conditions between counter-parties. In such an embodimentcounterparties must deposit the specified amount of funds into escrowaccounts provided to them by the contract management system before theycan sign. If the contract is not signed by all counter-parties by theexpiry time the contract management system returns the deposited escrowfunds to each respective counter-party. If the contract is signed by allthe counter-parties by the expiry time the payment subsequently occursafter the contract is signed. In some embodiments the counter-partiescan specify the times and amounts of payment, and the payments willautomatically be sent at the predetermined times. These paymentfunctions are performed by the Payment Engine 215.

The PRIVATE STORAGE 307 state occurs once all of the counter-partieshave signed the contract. In this state the contract data and metadata414 are stored in the Private Repository Database 223, e.g., in thedistributed revision control system Git. The contract data and metadatain the Private Repository Database 223 are accessible via a URL to userswith the necessary credentials, using the view 413. As an additionallayer of security the contract data and metadata 414 may also beencrypted to require that any entity who wants to access the data hasthe necessary credentials. Credentials include, but are not limited to,private keys and passwords. In some embodiments the contract data andmetadata 414 are stored in several separate repositories. In such anembodiment a counter-party may download the contract data and metadata414 to the memory 106 on a user's device. The contract data and metadata414 may be stored in a repository located in a Data Center 110, e.g., ina cloud.

Once the contract data and metadata have been stored in the PrivateRepository Database 223, the contract enters the DISTRIBUTED LEDGERSTORAGE 308 state. The Transaction Engine 211 creates two Bitcointransactions between wallets W1 203 a and W2 203 b. These wallets 203 a,203 b are managed by the Transaction Engine 211. The first transaction(e.g., record 404 b) includes the URL reference (e.g., reference 412) tothe stored contract data and metadata, described in the paragraph above,within the argument of the OP_RETURN command. This URL may be encoded,e.g., encrypted, by the Encoding Engine 213. The second transaction(e.g., record 404 a) includes a cryptographic hash of the contract data(e.g., reference 415), within the argument of the OP_RETURN command. Thecryptographic hash is generated by the Encoding Engine 213. The ContractDetails Database 221 and the Private Repository Database 223 are updatedto contain the references to these transactions (e.g., record 408 isupdated to contain references 409, 411). The transaction references maybe the Bitcoin transaction hash identifiers.

The Transaction Engine 211 includes the necessary transaction fees forthe transactions and submits them to the Bitcoin network via theDistributed Ledger Node 109. The two transactions are subsequently addedto the Distributed Ledger 401 within a single or two separate blocks byBitcoin miners. These blocks are subsequently confirmed by the Bitcoinnetwork as discussed in the background. Once the transactions aresubmitted to the Bitcoin network via the Distributed Ledger Node 109,the Validation Engine 212 periodically communicates with the DistributedLedger Node 109 to determine the most recent number of blockconfirmations and modifies the Contract Details Database 221accordingly. The Validation Engine 212 continues this process until bothblocks have received a certain number of block confirmations.

The Transaction Engine 211 may resubmit a transaction up to a specifiednumber of times via the Distributed Ledger Node 109 if the transactiondoes not appear in a block within a specified duration, or if the blockdoes not receive the necessary number of confirmations within aspecified duration. If the maximum number of resubmissions is exceededthe contract goes to the INVALID 305 state and the user is notified ofthe failure. The contract goes to the CONFIRMED 309 state once eachtransaction's block has received the necessary number of confirmations.

In some embodiments the URL reference is encrypted using the AES-256encryption algorithm by the Encoding Engine 213. In some embodiments thecontract cryptographic hash is computed using the SHA256 cryptographichash function by the Encoding Engine 213.

In some embodiments contract data and metadata are included on theBitcoin Blockchain using multiple transactions that encode the data asinvalid public key hashes which are included in transactions, by theEncoding Engine 213 and Transaction Engine 211. In such an embodiment,the Pay-to-PubkeyHash Bitcoin Script is used with the contract data ormetadata included as the public key hash data. The Bitcoins sent tothese addresses are not spendable since the corresponding public key isnot known.

In some embodiments the encoded data and metadata are stored in adistributed private ledger and optionally in the Bitcoin network. Insome embodiments a contract execution constraint is added to thetransaction. In such an embodiment, the constraint is encoded as aBitcoin Script field in a transaction, by the Transaction Engine 211.For example, the Transaction Engine 211 may specify a time in thetransaction's LOCKTIME field to ensure that it is executed only afterthe specified time.

In some embodiments the number of necessary block confirmations is 6. Insome embodiments different contracts require a different number of blockconfirmations. In some embodiments no block confirmations are necessary.In such an embodiment, the contract enters the CONFIRMED 309 stateimmediately after the Validation Engine 212 has determined that eachtransaction is in a block.

In the CONFIRMED 309 state the Contract Processing Engine 217 notifiesthe counter-parties that the data and metadata are securely stored. TheContract Processing Engine 217 provides the counter-parties withreferences to the contract's respective Bitcoin transactions (e.g.,records 404 a, 404 b) and private repository URL, as well as the accesscredentials to the private repository. The Contract Processing Engine217 updates the Private Repository Database 223 to include the Bitcointransaction references (e.g., references 409 and 411). Once all of theseupdates have occurred the contract moves to the VALID 310 state. In someembodiments the references stored in the Private Repository Database 223(e.g., references 409 and 411) include the hash identifiers of theBitcoin transactions generated in the DISTRIBUTED LEDGER STORAGE 308state. The VALID 310 state represents the final processing state of thecontract. In this state the contract data and metadata are available fordownload by the counterparties via the private repository.

FIG. 4 illustrates the state of the different storage systems once thecontract enters the VALID 310 state. Distributed Ledger 401 represents adistributed public, or private, ledger comprising of a number of blocks(e.g., 402 a, 402 b). Each block contains the block metadata (e.g., 403a, 403 b) and a number of records (e.g., 404 a, 404 b). The blockmetadata (e.g., 403 a, 403 b) is shared by all of the block's recordsand may include a time-stamp (e.g., 405 a, 405 b) of when the block wasgenerated. In Bitcoin, the Distributed Ledger 401 refers to theBlockchain, the block metadata (e.g., 403 a, 403 b) refers to the blockheader, and each record (e.g., records 404 a, 404 b) refers to atransaction within the block.

The private repository 410 includes a database 223 comprising of anumber of records (including record 408), that are accessible by usersvia a view 413. The view 413 provides entities with the necessarycredentials access to the database 223 via a URL. The view 413communicates 414 with the database 223.

Contract data and metadata 414 represents the user's contract data andmetadata. The Distributed Ledger 401 includes a record 404 a thatreferences 415 the contract data and metadata 414. The DistributedLedger 401 also includes a record 404 b which contains the reference 412to the view 413 of the private repository 410. The private repository410 includes a record 408 that contains references 409, 411 to theseBitcoin transactions 404 a, 404 b. The record 408 also contains anentire copy 416 of the contract data and metadata 414.

It will thus be seen that the objects set forth above, among those madeapparent from the preceding description, are efficiently attained and,because certain changes may be made in carrying out the above method andin the construction(s) set forth without departing from the spirit andscope of the invention, it is intended that all matter contained in theabove description and shown in the accompanying drawings shall beinterpreted as illustrative and not in a limiting sense.

The foregoing description, for purpose of explanation, has beendescribed with reference to specific embodiments. However, theillustrative discussions above are not intended to be exhaustive or tolimit the disclosure to the precise forms disclosed. Many modificationsand variations are possible in view of the above teachings. Theembodiments were chosen and described in order to best explain theprinciples of the disclosure and its practical applications, to therebyenable others skilled in the art to best utilize the disclosure andvarious embodiments with various modifications as are suited to theparticular use contemplated.

The system and method disclosed herein may be implemented via one ormore components, systems, servers, appliances, other subcomponents, ordistributed between such elements. When implemented as a system, suchsystems may include an/or involve, inter alia, components such assoftware modules, general-purpose CPU, RAM, etc. found ingeneral-purpose computers. In implementations where the innovationsreside on a server, such a server may include or involve components suchas CPU, RAM, etc., such as those found in general-purpose computers.

Additionally, the system and method herein may be achieved viaimplementations with disparate or entirely different software, hardwareand/or firmware components, beyond that set forth above. With regard tosuch other components (e.g., software, processing components, etc.)and/or computer-readable media associated with or embodying the presentinventions, for example, aspects of the innovations herein may beimplemented consistent with numerous general purpose or special purposecomputing systems or configurations. Various exemplary computingsystems, environments, and/or configurations that may be suitable foruse with the innovations herein may include, but are not limited to:software or other components within or embodied on personal computers,servers or server computing devices such as routing/connectivitycomponents, hand-held or laptop devices, multiprocessor systems,microprocessor-based systems, set top boxes, consumer electronicdevices, network PCs, other existing computer platforms, distributedcomputing environments that include one or more of the above systems ordevices, etc.

In some instances, aspects of the system and method may be achieved viaor performed by logic and/or logic instructions including programmodules, executed in association with such components or circuitry, forexample. In general, program modules may include routines, programs,objects, components, data structures, etc. that perform particular tasksor implement particular instructions herein. The inventions may also bepracticed in the context of distributed software, computer, or circuitsettings where circuitry is connected via communication buses, circuitryor links. In distributed settings, control/instructions may occur fromboth local and remote computer storage media including memory storagedevices.

The software, circuitry and components herein may also include and/orutilize one or more type of computer readable media. Computer readablemedia can be any available media that is resident on, associable with,or can be accessed by such circuits and/or computing components. By wayof example, and not limitation, computer readable media may comprisecomputer storage media and communication media. Computer storage mediaincludes volatile and nonvolatile, removable and non-removable mediaimplemented in any method or technology for storage of information suchas computer readable instructions, data structures, program modules orother data. Computer storage media includes, but is not limited to, RAM,ROM, EEPROM, flash memory or other memory technology, CD-ROM, digitalversatile disks (DVD) or other optical storage, magnetic tape, magneticdisk storage or other magnetic storage devices, or any other mediumwhich can be used to store the desired information and can accessed bycomputing component. Communication media may comprise computer readableinstructions, data structures, program modules and/or other components.Further, communication media may include wired media such as a wirednetwork or direct-wired connection, however no media of any such typeherein includes transitory media. Combinations of the any of the aboveare also included within the scope of computer readable media.

In the present description, the terms component, module, device, etc.may refer to any type of logical or functional software elements,circuits, blocks and/or processes that may be implemented in a varietyof ways. For example, the functions of various circuits and/or blockscan be combined with one another into any other number of modules. Eachmodule may even be implemented as a software program stored on atangible memory (e.g., random access memory, read only memory, CD-ROMmemory, hard disk drive, etc.) to be read by a central processing unitto implement the functions of the innovations herein. Or, the modulescan comprise programming instructions transmitted to a general purposecomputer or to processing/graphics hardware via a transmission carrierwave. Also, the modules can be implemented as hardware logic circuitryimplementing the functions encompassed by the innovations herein.Finally, the modules can be implemented using special purposeinstructions (SIMD instructions), field programmable logic arrays or anymix thereof which provides the desired level performance and cost.

As disclosed herein, features consistent with the disclosure may beimplemented via computer-hardware, software and/or firmware. Forexample, the systems and methods disclosed herein may be embodied invarious forms including, for example, a data processor, such as acomputer that also includes a database, digital electronic circuitry,firmware, software, or in combinations of them. Further, while some ofthe disclosed implementations describe specific hardware components,systems and methods consistent with the innovations herein may beimplemented with any combination of hardware, software and/or firmware.Moreover, the above-noted features and other aspects and principles ofthe innovations herein may be implemented in various environments. Suchenvironments and related applications may be specially constructed forperforming the various routines, processes and/or operations accordingto the invention or they may include a general-purpose computer orcomputing platform selectively activated or reconfigured by code toprovide the necessary functionality. The processes disclosed herein arenot inherently related to any particular computer, network,architecture, environment, or other apparatus, and may be implemented bya suitable combination of hardware, software, and/or firmware. Forexample, various general-purpose machines may be used with programswritten in accordance with teachings of the invention, or it may be moreconvenient to construct a specialized apparatus or system to perform therequired methods and techniques. Aspects of the method and systemdescribed herein, such as the logic, may also be implemented asfunctionality programmed into any of a variety of circuitry, includingprogrammable logic devices (“PLDs”), such as field programmable gatearrays (“FPGAs”), programmable array logic (“PAL”) devices, electricallyprogrammable logic and memory devices and standard cell-based devices,as well as application specific integrated circuits. Some otherpossibilities for implementing aspects include: memory devices,microcontrollers with memory (such as EEPROM), embedded microprocessors,firmware, software, etc. Furthermore, aspects may be embodied inmicroprocessors having software-based circuit emulation, discrete logic(sequential and combinatorial), custom devices, fuzzy (neural) logic,quantum devices, and hybrids of any of the above device types. Theunderlying device technologies may be provided in a variety of componenttypes, e.g., metal-oxide semiconductor field-effect transistor(“MOSFET”) technologies like complementary metal-oxide semiconductor(“CMOS”), bipolar technologies like emitter-coupled logic (“ECL”),polymer technologies (e.g., silicon-conjugated polymer andmetal-conjugated polymer-metal structures), mixed analog and digital,and so on.

It should also be noted that the various logic and/or functionsdisclosed herein may be enabled using any number of combinations ofhardware, firmware, and/or as data and/or instructions embodied invarious machine-readable or computer-readable media, in terms of theirbehavioral, register transfer, logic component, and/or othercharacteristics. Computer-readable media in which such formatted dataand/or instructions may be embodied include, but are not limited to,non-volatile storage media in various forms (e.g., optical, magnetic orsemiconductor storage media) though again does not include transitorymedia. Unless the context clearly requires otherwise, throughout thedescription, the words “comprise,” “comprising,” and the like are to beconstrued in an inclusive sense as opposed to an exclusive or exhaustivesense; that is to say, in a sense of “including, but not limited to.”Words using the singular or plural number also include the plural orsingular number respectively. Additionally, the words “herein,”“hereunder,” “above,” “below,” and words of similar import refer to thisapplication as a whole and not to any particular portions of thisapplication. When the word “or” is used in reference to a list of two ormore items, that word covers all of the following interpretations of theword: any of the items in the list, all of the items in the list and anycombination of the items in the list.

Although certain presently preferred implementations of the inventionhave been specifically described herein, it will be apparent to thoseskilled in the art to which the invention pertains that variations andmodifications of the various implementations shown and described hereinmay be made without departing from the spirit and scope of theinvention. Accordingly, it is intended that the invention be limitedonly to the extent required by the applicable rules of law.

While the foregoing has been with reference to a particular embodimentof the disclosure, it will be appreciated by those skilled in the artthat changes in this embodiment may be made without departing from theprinciples and spirit of the disclosure, the scope of which is definedby the appended claims.

1. A system comprising: a computer system having a distributed ledgerblockchain node, the node having a plurality of blocks wherein eachblock contains block metadata and one or more records wherein eachrecord contains information about a transaction within the block; asecure contract management server that is capable of being connected tothe distributed ledger blockchain node using an interface; a computingdevice that is capable of connecting to the secure contract managementserver over a network independent of the interface between the securecontract management server and the distributed ledger blockchain node;and the secure contract management server having a processor and amemory that is configured to construct, manage and securely storecontract data and contract metadata, the secure contract managementserver further comprising a validation engine to validate the blocks inthe distributed ledger blockchain node, an encoding engine to encodecontract documents and a contact processing engine to perform contactnegotations, collection of contract details and managing the validationengine and the encoding engine.
 2. The system of claim 1, wherein thesecure contract management server further comprises a signature engineto collect signatures from two or more entities to a contract beingmanaged by the secure contract management server.
 3. The system of claim2, wherein the secure contract management server further comprises apayment engine to manage one or more payments between the two or moreentities to the contract.
 4. The system of claim 3, wherein the securecontract management server further comprises a user account engine tomanage the two or more entities to the contract.
 5. The system of claim1, wherein the distributed ledger blockchain node further comprises abitcoin client full node.
 6. The system of claim 5, wherein thedistributed ledger blockchain node further comprises a bitcoin networkinterface that interfaces the bitcoin client full node to the bitcoinnetwork.
 7. The system of claim 1, wherein the encoding engine isconfigured to perform one or more of encryption, compute cryptographichashes, validate cryptographically signed documents and excutecompression algorithms.
 8. A contract management method, comprising:providing a distributed ledger blockchain node, the node having aplurality of blocks wherein each block contains block metadata and oneor more records wherein each record contains information about atransaction within the block; initializing, by a secure contractmanagement server, a contract between two counter parties, theinitializing the contract further comprising providing contract detailsfor the contract between the two counter parties; collecting, by thesecure contract management server, signatures of each of the counterparties to the contract within an expiry time; storing, in a privaterepository connected to the secure contract management server, contractdata and metadata about the contract that is signed by the two counterparties; storing, in a distributed ledger blockchain node connected tothe secure contract management server, two transactions in a block ofthe distributed ledger blockchain node, the first transaction containinga uniform resource locator reference to the contract data and contractmetadata stored in the private repository and the second transactioncontaining a cryptographic hash of the contract data; and confirmingthat the first and second transactions associated with the contractbetween the two counter parties are stored in the block of thedistributed ledger blockchain node.
 9. The method of claim 8 furthercomprising registering each counter party with the secure contractmanagement server.
 10. The method of claim 8, wherein providing contractdetails further comprising providing one or more of an email address foreach counter party, an expiry time for each signature and a copy of acontract document.
 11. The method of claim 10, wherein the contractdetails further include a message and payment details for the contract.12. The method of claim 8 further comprising negotiating the contractdetails before the signatures are collected.
 13. The method of claim 8,wherein the private repository storing further comprises encrypting thecontract data and metadata.
 14. The method of claim 8, wherein thedistributed ledger blockchain node storing further comprises creatingthe two transactions between a first wallet and a second wallet.
 15. Themethod of claim 14, wherein storing the first transaction in thedistributed ledger blockchain node further comprises encoding theuniform resource locator reference.